No one seems to know the true extent of the bad debt that global banks have taken on (mainly from US mortgages). As a result, UK Mortgage availability has dropped sharply this year. First time buyers and anyone without a clean credit rating is struggling to pay higher interest rates and can't raise the much larger deposits required in today's property market. Mortgage and property affordability has worsened significantly for many. Repossessions and distressed seller numbers are also on the increase.

 

The media is full of "doom and gloom" with rising fuel and commodity prices only making matters worse. It's only natural to fear for your mortgage, pension, job and house prices in particular. "Against this background, what are rich and successful investors doing and can you learn from them to overcome your fear and beat the crunch?" asks Nick Hopkinson of specialist firm, Fruitful Property. 

 

Gerald Ronson, successful boss of property firm, Heron said that he was excited by the current market at lunch last week. Admitting that he'd always made the most profit from deals bought during property "slumps" over the last 40 years of his business. "Everyone knows that property is a long term game and you need to take a 7 to 10 year view" Ronson continued. "You can never guess the bottom, but you'll always get a better deal when prices are falling than when they are on the way up!"

 

Liz Peace, Director of British Property Federation, summarised the winning attitude and strategy of successful investors for Fruitful's Hopkinson at a recent breakfast meeting "The Vultures are circling, as (property) prices drop they are starting to get some real bargains. The Rich will be the real winners from the current credit crunch. They always are!"

 

Prices may drop in the next year but by how much? Nick Hopkinson of Fruitful Property asks "Have the UK property market fundamentals changed?" UK inflation is still stable and well within the government target range of 1-3%. Interest rates are probably on a downward trend; nobody is suggesting interest rates are likely to rise significantly in the next couple of years. Latest employment figures are still very healthy; suggesting most people will continue to be able to afford their mortgages. UK Population growth and the chronic housing shortage continue unabated. In fact, new build starts are down 30 percent on last year which will make the housing shortage even worse than currently predicted in a few years time. Rising rents across England and Wales is further evidence of continued strong demand for housing (see the latest ARLA quarterly report).

 

Everyone's "bearish" on property at the moment, markets have very short memories and ordinary people are always driven by fear of losing out if prices fall further. This is exactly the time that savvy investors are stepping into the market and cementing their place on the future rich list. The fundamentals of long term growth in property are still the same as ever, but it is now a buyer's market if you have the money for deposits and can overcome your natural fear.

 

Fruitful clients are currently buying pre-Repossession property, pre-Auction and post-Auction property at below market value (BMV) prices by moving fast to help these distressed sellers. Our strategic relationships and buying power mean we are accessing deals that deliver high rent yields and positive cash flow currently. "Today's high rent yields mean 14 percent plus return on capital invested is common on these properties this year alone; regardless of any short term price movements." Hopkinson comments "this is much better than any bank savings!" Longer term, UK residential property has consistently outperformed most other investments and the fundamentals have not changed.

 

If you are serious about exploiting the current property buyer's market to build your asset base and grow your income call  Fruitful on 020 7031 8282 (weekdays 9am to 6pm) for an initial (no obligation) chat or send an email to info@fruitfulproperty.com with your name and daytime phone number to find out more.